Last week I had the pleasure of talking with Nik from Blast Radius in part 1 of our interview. This week I finish the interview were we talk about social media and how its integrating with client projects. We also dabble in what’s the difference between bought media, owned media and earned media. Lastly, we go over what he sees as the next major trend over the next couple years. Video games is going to be a huge part of this trend.

With the introduction of social media, are more clients talking with you guys about it for their projects?
We’re finding that every client talks to us about social media as part of their digital marketing strategy. This wasn’t the case 3 or 4 years ago but is totally the case today. Analysis by The Aberdeen Group found that 63% of the companies in their survey (defined as best-in-class) planned to increase their social media marketing budgets this year. So a lot of our clients want to be where everyone else is whether that is on Facebook or Twitter. Everyone at Blast Radius look at media in three ways:

• Bought or ‘rented’ media – BIG TV campaigns, print, press – the old bastions of traditional marketing
• Owned media – web-sites that not only deliver game information but provide original (produced) content regularly,
• Earned media – the social and community platforms that the VG companies are not in control of but can interact with and influence through providing social events and discourse

Rented media raises awareness and can drive consumers to Owned media where they find out more, get engaged, consume, generate and push content out to Earned media where it is consumed and drives other consumers back to the Owned media – and the cycle continues. However, we’re finding a few challenges lie in the monetization and measurement of value of social media. That’s one of the big areas I’m working on with clients at Blast Radius.

What do you see as a major trend in the next couple years?
A lot of our clients and the industry as a whole is moving towards average revenue per user  (ARPU) based relationship with their customers. Instead of seeing a game for $60 and having that one transaction, we are going to see a lot more publisher move towards selling that game unit + downloadable content (DLC) and eventually to a full subscription-based model enhanced with micro-transactions for premium upgrades and virtual goods. The idea being that this will increase the ARPU for the publisher and the customer will get a better experience out of the game. Some of the news and interviews in the industry are pointing towards this:

John Riccitiello – EA had this interview:
“There is a longer-term transition from a disk-based model for retail sales to an “average revenue per user” model. Five to seven years from now, investors will look at EA as how we have 100 million customers where we have an ARPU relationship that amounts to so many dollars a month…The ARPU model is a better margin business for us. It’s less cyclical. It’s a better business.”

Activision solidified their relationship with MASSIVE last year to include in-game advertising on 18 Xbox 360 and PC titles

THQ and MASSIVE are getting together:
“Dynamic, in-game advertising not only offers publishers new revenue opportunities, but when done properly creates added realism that can actually enhance game play,” said Kelly Flock, executive vice president of worldwide publishing, THQ.”

Playstation Home has some really good stats since launch.
• 4 million who still regularly use the service, an average of 55 minutes per session is surprisingly high.
• By January 2009 they had generated $1m in revenues from virtual goods sales since it’s launch on December 11th 2008

Only last week MindArk’s MMO Entropia Universe has been granted a license by the Swedish Government to conduct legal banking activities. More big changes are coming for video games and how we market and sell them digital and that’s only going to make the business more competitive and fun.

Thoughts?
It was great to chat with Nikolas Badmintonand something I hope to continue as we move into 2009. If you want to reach Nik at Blast Radius, you can do so here. What do you see as a big trend over the next 2 or 3 years?